DoD's $35M L3Harris contract for aircraft parts saw no competition, raising value concerns

Contract Overview

Contract Amount: $35,003,236 ($35.0M)

Contractor: L3harris Technologies Integrated Systems L.P.

Awarding Agency: Department of Defense

Start Date: 2017-10-27

End Date: 2021-12-31

Contract Duration: 1,526 days

Daily Burn Rate: $22.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF ACAT III BIG SAFARI

Place of Performance

Location: GREENVILLE, HUNT County, TEXAS, 75402

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $35.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P. for work described as: IGF::OT::IGF ACAT III BIG SAFARI Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The lack of competition is a significant risk indicator for value for money. 3. Performance context is limited due to the sole-source nature and lack of comparative data. 4. The contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. 5. The contractor, L3Harris Technologies, is a major defense supplier, suggesting established capabilities. 6. The contract duration of over 4 years indicates a substantial, long-term need.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the pricing or assess the value for money. The sole-source award suggests potential for higher costs compared to a competed contract. Further analysis would require access to cost breakdowns and comparisons with similar sole-source awards for comparable parts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This significantly limits competition and price discovery. The absence of multiple bidders prevents a robust comparison of offers and may lead to less favorable pricing for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price, as the government did not leverage competition to drive down costs.

Public Impact

The Department of the Air Force benefits from the acquisition of necessary aircraft parts. This contract supports the operational readiness of Air Force aircraft. The geographic impact is primarily within Texas, where L3Harris Technologies is located. Workforce implications are likely within L3Harris's manufacturing facilities, supporting skilled labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can indicate potential barriers to entry for other suppliers.
Limited transparency in pricing due to non-competitive nature.

Positive Signals

Contract awarded to a known, established defense contractor (L3Harris).
Contract duration suggests a stable, ongoing need for these parts.
The contract is for essential aircraft parts, supporting military operations.

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the aerospace and defense industry. This sector is characterized by high technological demands, stringent quality control, and significant government procurement. Comparable spending benchmarks are difficult to establish without more specific part details, but the overall defense aerospace manufacturing market is substantial.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to have significant subcontracting implications for small businesses based on the provided information. The sole-source nature further reduces opportunities for small business participation through competitive bidding.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Transparency is limited due to the sole-source award, making detailed public scrutiny of the value proposition challenging.

Related Government Programs

Aircraft Parts Procurement
Defense Logistics Agency Contracts
Air Force Sustainment Contracts
Sole-Source Defense Procurements

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency
Sole-Source Award Justification Unclear

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.0 million to L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P.. IGF::OT::IGF ACAT III BIG SAFARI

Who is the contractor on this award?

The obligated recipient is L3HARRIS TECHNOLOGIES INTEGRATED SYSTEMS L.P..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $35.0 million.

What is the period of performance?

Start: 2017-10-27. End: 2021-12-31.

What specific aircraft parts are covered under this contract?

The provided data classifies this contract under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' However, it does not specify the exact nature of the parts. These could range from complex avionics components to structural elements or engine parts. Understanding the specific parts is crucial for assessing their criticality, uniqueness, and potential for competitive sourcing in the future. Without this detail, it's challenging to determine if the sole-source justification was truly warranted due to proprietary technology or unique manufacturing processes.

What was the justification for the sole-source award?

The data explicitly states the contract type was 'NOT COMPETED,' indicating a sole-source award. Standard justifications for sole-source awards in defense contracting often include unique capabilities, proprietary technology, urgent and compelling needs where only one source can reasonably fulfill the requirement, or follow-on work to a previously competed contract where only the original contractor can provide the necessary integration or compatibility. Without further documentation, the specific justification remains unknown, but the lack of competition is a primary concern for value.

How does the contract value of $35 million compare to similar sole-source aircraft parts contracts?

Comparing this $35 million contract value to similar sole-source aircraft parts contracts is challenging without more specific details on the parts themselves and the contract's duration and scope. However, for a contract spanning over four years (October 2017 to December 2021), $35 million is a significant sum. Sole-source awards, by their nature, tend to be more expensive than competitively bid contracts. To assess value, one would need to compare the per-unit cost of these parts against market rates or against costs for similar parts procured competitively by the DoD or other agencies, which is not possible with the current data.

What is L3Harris Technologies' track record with the Department of Defense?

L3Harris Technologies is a major defense contractor with a substantial history of working with the Department of Defense across various sectors, including aerospace, communications, and electronic systems. They are known for producing a wide range of military equipment and providing related services. Their track record generally indicates a capacity to meet complex defense requirements. However, the specific performance history on this particular sole-source contract, especially regarding cost control and delivery timeliness, would require a deeper dive into contract performance reports and any associated award or termination notices.

What are the potential risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for overpayment due to the absence of competition. Without competing bids, the government lacks leverage to negotiate the lowest possible price. Other risks include vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future options or flexibility. There's also a risk that innovation may be stifled, as the incumbent contractor may have less incentive to improve efficiency or reduce costs when facing no competitive pressure. Finally, the lack of transparency inherent in sole-source awards can obscure potential inefficiencies or cost overruns.

Are there any indications of program effectiveness or performance issues?

The provided data does not contain specific performance metrics or indicators of program effectiveness for this contract. The contract was awarded as a Delivery Order (AW: DELIVERY ORDER) under a larger contract vehicle, and its duration was 1526 days (approximately 4.18 years). Without access to performance reports, quality assessments, or user feedback related to the delivered aircraft parts, it is impossible to evaluate the effectiveness or identify any performance issues. The 'NOT COMPETED' status and lack of detailed performance data limit this assessment.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc

Address: 10001 JACK FINNEY BLVD, GREENVILLE, TX, 75402

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,135,948

Exercised Options: $35,135,948

Current Obligation: $35,003,236

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA862016G3027

IDV Type: BOA

Timeline